Fed Officials Doubtful of December Rate Cut as Odds Decrease
Concerns regarding a potential rate cut at the upcoming December meeting of the Federal Open Market Committee (FOMC) have been voiced by several Federal Reserve officials. Key figures such as Atlanta Fed President Raphael Bostic and Minneapolis Fed President Neel Kashkari have emphasized ongoing inflation issues, which remain above the Fed’s 2% target.
Fed Presidents’ Perspectives on Rate Cuts
Notably, Bostic recently announced plans to retire at the end of his term in February 2026. This transition may influence discussions within the Fed.
As Nick Timiraos, chief economics correspondent for the Wall Street Journal, pointed out, four voting Fed presidents—Collins, Musalem, Goolsbee, and Schmid—are not advocating for a December rate cut. This lack of support underscores the cautious stance among Fed officials.
December Rate Cut Odds Decline
The likelihood of a 25 basis point rate cut in December has dwindled significantly. According to data from CME’s FedWatch tool, the odds of this cut are currently at 53.6%. This is a considerable drop from the previous days:
- 62.9% a day ago
- 69.6% a week ago
- 95.5% a month ago
This decline reflects growing uncertainties related to inflation and labor market data, compounded by a blackout due to the ongoing government shutdown.
Current Economic Indicators
The latest economic indicators include:
- September Consumer Price Index (CPI) inflation rate: 3%
- Unemployment rate: 4.3%
These figures contribute to the complex landscape that the Federal Reserve navigates. The interplay between inflation rates and employment figures will be crucial in determining future monetary policy.
As the financial landscape evolves, all eyes will be on the upcoming FOMC meeting. The decision-making process could significantly influence economic conditions moving forward.
